Myth Busted: Small business owners forget that disgruntled employees can make claims for wages before the Labor Commissioner— without hiring an attorney— and more often than not they can recover a lot of money.
In the last six months I heard about two small employers whose employees became dissatisfied and went to the Labor Commissioner. The employer with four employees had an award of about $40,000 against it. The employer with 18 employees had to pay about $25,000. Now it is defending similar complaints from the other employees who were also denied overtime.
Suggestions for Reducing Risk
- Don’t rest on the idea that all of your employees love you and they would never turn against you. Sadly it happens much more frequently than you think.
- Get realistic human resources and legal advice about how the Labor Commissioner rules on overtime claims before you make your decision as to who will be paid overtime. In practice these agencies find against employers far more often than finding in favor of the employer.
- Pay overtime from the get-go. The law permits small business owners to manage the payment of overtime. Many business owners find they actually increase productivity and save money through a closely-managed overtime program.